| March 5, 1990 | |
| WINNIPEG TAXATION CENTER | HEAD OFFICE |
| Assessing Division | Financial Industries Division |
| David Barlow | A. Seidel |
| Taxpayer Services Section | (613) 957-8960 |
| File No. 7-4567 |
Subject: Prescribed Annuity Contracts ("PAC")
This is in reply to your memorandum dated November 30, 1989 with respect 24(1)
All references to statute are references to the Income Tax Act unless otherwise indicated.
24(1)
Our Position
Based on the information submitted on behalf of the taxpayer, it is our view that subsection 304(1) of the Income Tax Regulations does not in anyway provide for a deferral of the interest received by the taxpayer from the certificate and acquired a PAC with the proceeds of disposition.
Accordingly, the taxpayer is required to include in income the interest received in 1987 pursuant to paragraph 12(1)(c). There is no provision in the Act, however, that permits a deduction for interest income used
24(1)
We hope our comments are of assistance to you. If you have any questions related to the above please do not hesitate to call us at the above number
Chief Financial Institutions SectionFinancial Industries DivisionRulings Directorate